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Members of the APEC meeting in Vietnam discussing future of TTP

2017/11/10 19:08:10

The remaining members
of the Trans-Pacific Partnership (TTP) are trying to reach an agreement on a
new deal that would enable them to move forward without the participation of
the USA at the Asia-Pacific Economic Cooperation (APEC) meeting of foreign and
trade ministers in Vietnam.

The
APEC summit is being carried out in Vietnam, where the participating
representatives of all APEC countries talk about enhancing their cooperation
and promote free trade in a time of rising protectionism.

The
emerging Asian economies are most affected by the new protectionism strategy
that is arising in many countries in recent years. The reasons can be found in
the strategy of countries like Vietnam have opted for an economic model based
on export-driven growth and trade-oriented industrialization, according to DW.

Nations
with such an economic strategy are particularly dependent on the free movement
of goods. The current free trade crisis is putting pressure on emerging,
export-orientated states, as they urgently need to look for alternatives and
take countermeasures.

Against
the backdrop of increasing headwinds to global trade, the APEC gathering at
least offers an opportunity for Asian countries to formulate a common position.

The
Asia-Pacific Economic Cooperation is a forum for 21 Pacific Rim member
economies that promote free trade throughout the Asia-Pacific region.

About the TPP

The
Trans-Pacific Partnership is one of the world's biggest multinational trade
deals and had been signed originally by 12 Pacific Rim nations. Australia,
Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore,
the United States and Vietnam. Those economies account for 40 percent of the
global economic output and 26 percent of world trade.

The
far-reaching deal, which notably excludes the People’s Republic of China, aims
to dismantle tariff and non-tariff barriers to trade and investment between the
participant countries. It also foresees streamlining regulations, and the
implementation of common standards for the protection of foreign investment and
intellectual property, among other things.

The
reason for China missing in the agreement is explained by the country is not
prepared to meet the high standards of free trade and investment encouraged in
the TPP. It may be ready to join in the coming years ahead, though.

TPP without the USA

In
January, in one of his first moves after taking over as US president, Donald
Trump signed a decree pulling his country out of the Trans-Pacific Partnership,
an ambitious trade deal of his predecessor Barack Obama's Asia-Pacific
strategy.

Still,
leaders of some of the 11 other countries party to the agreement have
reiterated their support to the TPP and are looking for ways to salvage the
pact.

The
Australian government also suggested that China could replace the US in the TPP
bloc, with Trade Minister Steven Ciobo quoted by the Australian Broadcasting
Corporation as saying: "There would be scope for China if we were able to
reformulate it to be a TPP 12 minus one, for countries like Indonesia or China
or indeed other countries to consider joining. Beijing "hasn't been slow
to spot the opportunity" to cast itself as a free trade supporter.

China proposing a new
trade deal agreement

In
the meanwhile, the government in China is already playing a leading role
negotiating another economic-based agreement, the Regional Comprehensive
Economic Partnership (RCEP) agreement. It is seen as a free trade deal that is
widely regarded as a rival to the TPP.

The
RCEP brings together the 10 members of the Southeast Asian grouping ASEAN plus
China, India, Japan, South Korea, Australia and New Zealand, but notably
excludes the USA.

There
are considerable differences between the TPP and the RCEP deals. The TPP is a
far-reaching pact, aimed at dismantling tariff and non-tariff barriers to trade
and investment among the participant countries. It also foresees streamlining
regulations, and the implementation of common standards for the protection of foreign
investment and intellectual property, among other things.

The
RCEP, on the other hand, is a much more narrowly conceived trade agreement,
whose key aim is to lower tariffs among the participating nations.

For
large parts of Asia, China is already a bigger export market than the USA, and
its growth prospects are much better. By including Korea as well as the rest of
ASEAN, more Asian countries are included in the RCEP talks than the TPP.

China,
however, is not the sole beneficiary of the US' exit from the TPP. Countries
like the Philippines, South Korea and Thailand, which are not part of the TPP,
are also considered to profit from the development. "These countries would
have seen their growth prospects suffer if the TPP triggered the formation of regional
supply chains which excluded them.

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